1. Field of the Invention
The present invention relates to systems and methods for conducting financial transactions, and in particular, utilizing the Internet, including the World-Wide Web, and the public telephone system.
2. Background Art
The telephone system in place in this country offers a service which identifies to a called party the telephone number of the calling party. This service is robust, secure, and to the best of Applicant's knowledge, always correct. This service has been used by computerized information systems for many years in the field of customer care and customer assistance to provide, for example, a customer care representative with records associated with the calling party. Such systems have reduced the need for a called party to make extensive inquiries from the calling party. Other systems presently in use allow a caller to automatically activate a new credit-card by calling from the caller's home telephone and by inputting with the telephone's touch-tone keypad the caller's social security number or other identification presumably known only by the caller and the called party.
Many systems are presently in place to provide telephonic shopping for goods and services as an alternative to physical presence in a store. For example, customers often use a paper catalog for selection of goods and use a telephone for placing orders and for paying for orders. While this method of shopping can be convenient, it involves printing and distribution costs associated with the paper catalogs as well as costs associated with a call-handling center. For the shopper, each purchase requires a separate transaction with the particular merchant involved. A shopper cannot browse several catalogs, cannot choose a number of items for purchase and make a single call to central number to complete the entire purchase transaction. For each separate purchase, there is a requirement for providing shipping and billing information. Additionally, a paper catalog is more limited than an Internet-based catalog in the amount of information it can present to a customer.
Increasingly, merchants are selling goods and services on the World-Wide Web (WWW). However, although the Web is ideal for browsing, online transactions are not secure over a public network. Even with the available encryption systems, customers are wary of transmitting their credit card numbers, since the credit card information will be passed from node to node and therefore will be subject to interception at multiple points. There is a need for transactions to be made more safely and conveniently while maintaining the convenience of browsing the WWW.
To the best of Applicant's knowledge, in all present methods of purchasing goods and services using the Internet, one of the following is true: the customer is required to transmit sensitive financial information over a non-secure medium; the customer is required to memorize a password or other secret code; the customer is required to note the merchant's telephone number to call; the customer is required to provide shipping and billing information; the customer is required to complete each purchase transaction with each merchant separately and independently of the customer's transactions with other merchants. Any one of the requirements is alone limiting. Furthermore, the repetitive burden of providing billing and shipping information to more than one merchant is a source of errors, frustration, and lost sales.
In summary, paper catalog sales are generally regarded as being safe, but suffer from the lack of features which are provided by the Internet, namely browsing of extensive information, instant access to cross-referenced items, increased number of items available for selection, reduced cost of catalog distribution, and other conveniences.
A basic electronic commerce system 100 using the Internet is shown in FIG. 1. A user's computer, 11, is connected using a network connection to the Internet, 12, to a merchant's web server, 40, connected to the Internet by a network connection, 42. The user's computer displays the merchant's web page 20, on its display, 10. The user selects items for purchase by clicking on appropriate links and buttons on the merchant's web page. As items are selected by the user, the web server adds the selected items to a database, 43, connected to the web server, 40, by a private network link, 45. This system, 100, is in use by a number of online stores. To purchase the selected items, the user enters personal information such as shipping address and name in an input area 23 of the web page, and financial information such as a credit-card number, in an area 21, for use by the merchant's web server, 40. When user clicks on a button, 22, to indicate the desire to purchase the selected items, the financial information, 21, is transmitted to the web server, 40, using the Internet connection, 12, and the Internet connection, 42. The web server, 40, associates the financial information, 21, with the selected items in the database, 43, creates a sales record, connects to a merchant financial transaction center, 60, using a link, 65, which uses either the Internet or a private network, for authorization of the transaction, and, upon approval, confirms the sales record in the database, 43.
At this point, the selected items have been purchased and can be delivered to the user. The selection sub-system, 100, together with the financial transaction center, 60, comprise an electronic commerce system.
U.S. Pat. No. 5,677,955, hereinafter “Doggett '955”, discloses a system for Internet transactions. Doggett '955 discloses the use of cryptography to increase the security of messages transmitted over the Internet between a buyer and merchant of goods and between a merchant and a buyer's financial institution.
Rose et al.'s U.S. Pat. No. 5,757,917, hereinafter “Rose '917”, teaches an improvement on previous purchasing systems by suggesting the use of E-mail as means for confirming the customer's intent to purchase goods and services and also as means for verifying the identity of the customer. Rose '917 relies on E-mail, which is generally not considered a secure means of communication.
First Virtual Holdings, Inc., hereinafter, “FVH”, is the assignee of Rose '917. FVH operated a members-only payment system wherein a “VirtualPIN” was assigned to its members. Merchants affiliated with the transaction center accepted a member customer's “VirtualPIN” in lieu of a credit-card number and contacted FVH to translate the customer's alias into a credit-card number and payment authorization.
The Internet is an ever-increasingly popular tool for consumers to get information on goods and services, to make comparisons between different products from different companies, and to browse catalogs and on-line stores. Electronic commerce is hindered by the lack of security inherent in the Internet's design and infrastructure.
The Internet has disadvantages. It is considered by knowledgeable persons not to be adequately secure. Use of the Internet typically requires a PC and appropriate software. While most PC users have the basic requirements for accessing Internet stores, electronic commerce solutions on the market today require users to install additional software, such as an electronic wallet or electronic transaction assistant.
Users of the Internet typically establish a connection to the Internet using a PC and use a web browsing software called a “browser.” A session on the Internet is the period from when a connection to the Internet is established to when that connection is terminated.
Cryptographic techniques have been the predominant solution offered to solve the security problem of transactions conducted using the Internet.